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International Internet Magazine. Baltic States news & analytics Monday, 15.07.2024, 15:58

Coalition in Latvia agrees to increase government guarantees for study loans

BC, Riga, 16.11.2020.Print version
The government coalition on Monday agreed on raising the amount of government guarantees available for study loans, Raivis Dzintars, leader of the National Alliance, told journalists following the weekly coalition meeting, informs LETA.

The politician indicated that study loans might not be available to students at the moment as the limit of the government guarantees for this year has been exhausted.

"In our view, this is an unacceptable situation, therefore the National Alliance insisted on resolving this issue quickly and taking the decision in the government tomorrow. The coalition has reached an agreement on such a decision," Dzintars said. 

As reported, on November 12, Swedbank suspended issue of study and student loans with guarantees by Development Financial Institution Altum because the government resources allocated for the purpose had been exhausted.

The bank said that it is ready to resume issue of loans as soon as the necessary funding is available. According to the current estimates, the Education and Science Ministry should find EUR 600,000-700,000 for the purpose.

In line with the new regulations that were adopted this year, students applying for study or student loans will not be required to have a guarantor as, from now on, Altum will act as the guarantor for study and student loans.

The Finance Ministry said earlier that the Education and Science Ministry's new system of study and student loans, which came into force at the beginning of this year, is not sustainable as the availability of loans for student will continue to deteriorate, therefore the system needs to be improved as soon as possible.

According to the Finance Ministry, the total amount of student and study loans stands at EUR 15.8 million at the moment, even though EUR 13 million has been earmarked for student and study loans in the state budget this year. The Finance Ministry believes that, therefore, the Education and Science Ministry must promptly come up with a solution.

Study and student loans must be available to all those who want to study, and the system must not be complicated, the Finance Ministry points out.

According to the new system of student and study loans that the Cabinet of Ministers supported in 2019, approximately 2,000 new loans are to be issued annually, with the individual loan amount of EUR 6,500. The total amount of student and study loans this year was projected at EUR 13 million.

The total amount of student and study loans issued by November this year exceeds the total loan projection by EUR 2.8 million. The Finance Ministry points out that it is unacceptable that a solution is being sought while new liabilities have already been assumed. The Education and Science Ministry must offer a long-term solution, the Finance Ministry insists.

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